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Hyperinflation, Money Supply and the Consumer Price Index

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

What's hyperinflation?

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1. If a country has a money supply of 20 billion dollars, a real GDP of 100 billion dollars, and a price level of 1, then what's the velocity of money in this country?

2. How can government overspending cause hyperinflation?

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About This Quiz & Worksheet

Economists have come to many conclusions about hyperinflation and the money supply. This quiz and worksheet combo will test your comprehension of the definition, causes, and effects of hyperinflation.

Quiz & Worksheet Goals

These assessments address the following concepts:

  • Why inflation happens
  • Economist Milton Friedman's beliefs about inflation
  • How to define hyperinflation
  • What theory economists use to explain the hyperinflation link

Skills Practiced

  • Making connections - use understanding of the concept of hyperinflation relating to the money supply
  • Information recall - access the knowledge you've gained regarding inflation theories
  • Knowledge application - use your knowledge about inflation to answer a practical scenario

Additional Learning

If you would like to delve deeper into this subject, check out the supplemental lesson called Hyperinflation, Money Supply and the Consumer Price Index. You will gather more information about the following topics:

  • Why hyperinflation happens
  • What factors determine inflation
  • Examples of the economic output formula
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